- USD/TRY extends the upside and breaks above 8.6000.
- Turkey’s End of Year CPI Forecast came in at 16.74%.
- The lira losses further ground ahead of the CBRT event.
The Turkish lira depreciates further and pushes USD/TRY to new 5-week highs past the 8.6000 yardstick on Friday.
USD/TRY targets YTD highs around 8.8000
TRY rapidly losses ground and motivates USD/TRY to advance for the second session in a row and break above the consolidative theme that prevailed earlier in the week. The pair’s upside gathered extra pace after spot surpassed the 55- and 100-day SMAs around 8.5000.
The lira has been accelerating its losses vs. the dollar pari passu with rising investors’ cautiousness ahead of the next monetary policy meeting by the Turkish central bank (CBRT) due next week. Indeed, fears of the start of the easing cycle much sooner than anticipated (and needed) by the CBRT have been exacerbated after the central bank announced last week that the core inflation will now be the anchor to set the policy rate (instead of the headline CPI).
It is worth recalling that the headline CPI rose above the 19.0% level in August – and above the bank’s One-Week Repo Rate - and that the government now sees the inflation heading lower to 16.2% by year-end and 9.8% by end of 2022.
USD/TRY key levels
So far, the pair is gaining 0.76% at 8.5919 and a drop below 8.4013 (low Sep.10) would aim for 8.3905 (20-day SMA) and finally 8.2590 (monthly low Sep.6). On the other hand, the next up barrier lines up at 8.6806 (monthly high Aug.11) followed by 8.7303 (high Jul.8) and then 8.7974 (2021 high Jun.25).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.